Investors mull new Brazil regas projects

OREANDA-NEWS. June 01, 2016. Investors are considering the installation of two new regasification projects in Brazil, potentially breaking the hegemony of Brazilian state-controlled company Petrobras.

Norwegian LNG transport firm Golar presented a regas project to the state government of Para in the Amazon basin.

Government officials confirmed that executives from the firm are developing a proposal to build a regasification terminal at Vila do Conde Port, in the municipality of Barcarena.

The Brazilian government plans to hold an auction on 10 June for six port concessions in Para state, including Vila do Conde.

Golar?s proposal to the state government features an LNG regasification terminal to supply new power generation plants and local industries that currently have no access to natural gas.

Golar could not be reached for comment.

The company already has two floating storage and regasification units (FSRU) in Brazil –Golar Spirit, which has regasification capacity of 2.5bn m3/yr and is docked at Petrobras' Pecem terminal in Ceara state, and Golar Winter, which has regasification capacity of 5.1bn m3/yr capacity and is docked at Petrobras' Bahia terminal in Bahia state.

Petrobras also owns the 28mn m3/d Guanabara terminal in Rio de Janeiro state.

Another new regasification plant would be built at Porto Central, a R\\$5bn (\\$1.38bn) port project in the city of Presidente Kennedy in southern state of Espirito Santo. Porto Central is a joint venture between Espirito Santo-based firm TPK Logistica and the Port of Rotterdam.

The project foresees the construction of a 2mn m3/day LNG regasification terminal which would initially supply two 464MW combined cycle power plants, President Kennedy 1 and 2. Both projects have already received environmental licenses, and participated in a 29 April auction for new power purchase agreements. But they did not sign long-term power purchase agreements (PPAs).

A total of five thermoelectric plants, including both gas and coal-fired plants, could also be developed in the port complex, according to Porto Central.

Construction of the port project is expected to begin in the second half of 2016, with port operations starting in 2018. The project includes areas to handle oil, gas, dry bulk, containers and general cargo.

Petrobras included the Guanabara and Pecem terminals in its asset divestiture program, but industry executives say the sale is complicated by contracts held by the company?s associated power stations.

For the moment, all three Petrobras LNG terminals are underutilized. According to Petrobras, imports averaged around 18mn m3/d in 2015, compared with 20.8mn m3/d in 2014, 14.4mn m3/d in 2013, and 8.4mn m3/d in 2012.

Brazilian LNG imports kicked off at Guanabara in 2009.